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DBS Initiation on LVGEM (China) with “BUY” Rating and HK$2.97 Target Price Author: CHINA LVGEM


(June 8, 2020, Hong Kong) LVGEM (China) Real Estate Investment Company Limited (“LVGEM (China)” or the “Company” or together with its subsidiaries, the “Group”; stock code: 00095.HK) is pleased to announce that the Company was initially covered a research report and rated “BUY” with target price of HK$2.97 by DBS Bank Limited (“DBS”), fully reflecting the recognition and confidence of the capital market in the company’s growth prospect.

DBS believes, LVGEM (China) is the redevelopment specialist in the GBA with c.Rmb240bn saleable resources in prime locations at superior margins, including Bashizhou project and c.300k sm of investment properties in Shenzhen, which has attractively trading at 77% discount (or 58% on fully diluted basis) to NAV. Based on the report, LVGEM (China) has over 20 years of experience and involved in 11 urban renewal projects in Shenzhen and has deep participation in the redevelopment space that the Company has enjoyed notably higher-than-peers’ gross margins of >50% in the past five years. With its visible urban

renewal project pipeline ahead, DBS believe its superior profit margins can be sustained. The market has yet to fully appreciate LVGEM’s value, therefore, in view of the good performance of LVGEM (China), DBS initially assigns the Company “BUY” rating with target price of HK$2.97, which means that the Company’s current stock price still has about 20% upside.

The management of LVGEM (China) comments, the Company has been published research report and assigned “BUY” rating by DBS that shows the capital market’s full affirmation to the Company’s asset quality and financial performance. In the future, the Company will focus on developing undervalued shantytown renewal projects in the GBA, and actively optimize the capital structure by creating different financing channels to create more profits so as to provide more values to shareholders and investors.

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